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Bear Stearns agrees to pay $250m in fund case

Bear Stearns said on Thursday that it would pay $250m (â‚¬208m) to regulators to settle accusations that it engaged in abusive mutual fund trading practices.

The settlement caps lengthy and arduous negotiations among the firm, the Securities and Exchange Commission and the New York Stock Exchange, and makes Bear Stearns the last major Wall Street firm to pay fines in connection with improper fund trading practices first uncovered by Eliot Spitzer, the New York attorney general, in 2003.

The fine is a steep one, representing more than half of the firm's net profit for the fourth quarter, which it reported on Thursday as $407m, or $2.90 a share, an increase of 15% over the quarter a year ago. Robust trading results helped drive the firm's gains.

Bear's its revenue from investment banking fell 46% to $231.2m from $424.7m. The reason for the drop: In the year-ago quarter, it logged almost $200m in merchant-banking revenue, primarily from the sale of shares in New York & Co.

The bank's fixed-income capital-markets net revenue was $838.6m, up 18% from a year ago and 13% from the previous quarter. Its institutional-equities net revenue was $372.6m, up 25% and 12%, respectively.